As you can see, it's pretty good, a 15% annualized return vs a 6%
for the S&P500 over that period.

Volatility was higher but not extremely so (20% vs. 15%), while
the beta was pretty close to 1.0.

Eric
Falkenstein

Is this a crazy recent phenomenon? No. In 2003
McConnell and Ovtchinikov looked at 311 spinoffs undertaken
by 267 parents between January 1965 and December 2000. On
average, subsidiaries outperformed their benchmark companies by
over 20% over the first three years following the spinoffs, with
most of the excess returns within the first 12 months of trading.
They found the parent company outperformed as well, but not by a
robust amount.

I don't think there's a rational explanation for this. I remember
at Moody's
when they just spun off from Dunn &Bradstreet, it was really
liberating. For years D&B had used the considerable Moody's
cashflow to fund their dumb ideas to extend D&B, which really
ran the executive board while Moody's made all the money.
It was a classic waste of shareholder money, and so when the
spin-off finally happened in 2000, Moody's (MCO) stopped burning
its cash and investors reaped the windfall (32% return,
annualized, from 2000-present). It's amazing how much money is
wasted via such politics, but it's a classic case of a bad
incentives and difficult monitoring.

It makes one wonder about the value potential in Citi (C). If
someone could force it to sell itself into pieces, I bet everyone
with defensible interests would hit a home run. Letting a
$120B company underperform is really painful to behold. The only
people such behemoths serve now are a select bunch of executives
and politicians, not shareholders, consumers, or 99.99% of Citi
employees.